The Path Of Interest Rates & Impact On Your Money, LFG Daily - January 13, 2026

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Colin Symons, CIO Lloyd Financial Group

I was going to write about real yields, but given all the excitement over the weekend, I think it makes more sense to talk about how to deal with these tape bombs like we saw over the weekend.

Ultimately, what matters is what’s going to happen to growth, inflation, and liquidity. Who did what wrong, how immoral it all is, and so on just doesn’t matter. Leave that drama for the news shows. Our job here is to figure out the extent to which there is likely economic change, and how lasting it’s likely to be. Everything else just invites financial mistakes.

For simplicity’s sake, let’s just focus on the Fed news, where the DOJ is launching a criminal investigation into the Federal Reserve’s large renovation project. Of course, there’s a lot of rhetoric surrounding this, but that’s unimportant. What is important is what it changes in our system and how long that lasts.

In this case, the dollar sold off, and the yield curve steepened, though the moves were never that big and moderated over time. That seems rational, to me. To the extent anything changes, we should probably expect an increased pace of easing, which would weaken the dollar faster. Really, though, as you can see in the bottom part of the December rate cut expectations, below, expectations have changed very little.

I’ll also briefly touch on this framework with regard to financials, as it’s having a bigger impact, there. Trump floated the idea of a 1-year, 10% cap on credit card rates. In short, it’s like some people have never watched Trump negotiate, before. He comes out with an unrealistic ask, they meet in the middle, and everyone walks away feeling like a winner, more or less. Will credit card companies end up having a slightly worse business? Probably, but nothing that’s the end of the world. Think of what’s happened in the past, in these situations.

It’s definitely worth noting that sometimes these events are, in fact, significant in the longer-term and need immediate action. Just consider if there’s a likely impact on growth, inflation, or liquidity or if the move is more about positioning fear. In this case, I don’t see the shift. The only concern is away from the headlines, with Republican Senator and Senate Banking Committee member Tillis saying he would oppose any Fed nominee until the legal matter is fully resolved. That could slow Trump’s rate-cut plans.

Lastly, the Fed concern didn’t seem to last very long, but our plan was to do nothing with the action. It’s always good to have contingency plans in place for potential outcomes, and in this case, it didn’t look like there would be enough of a reaction to do anything worthwhile. If by chance the market dropped 5% or more, maybe we would have become more aggressive, but that looked unlikely and looks even less likely, now. Remember, when these newsy events hit, try to think about what it can really affect and operate within that scope. Definitely don’t cling to an idea that’s not working out, like the thought that markets should have plunged on this news, for whatever reason you had. Opinions can be very expensive in markets, I prefer math.

NFIB Small Business Optimism edged higher, to 99.5, with price hikes dropping.

Senate Banking Committee member Tillis said he would oppose the nomination of anyone until legal matters are fully resolved, which could slow rate-cut hopes. It is worth noting the Fed renovation plans started in 2018 at an estimated cost of $75M and is now $2.5B, as they expanded plans, met asbestos, and more. That’s an impressive increase.

Trump is imposing a 25% tariff on anyone doing business with Iran. Presumably trying to isolate Iran and maybe have an indirect tariff on China, who buys a lot of oil from them (as do India and Turkey.)

Earnings officially season starts up, today.

Big slate of economic data, today, headlined by CPI. We also have New Home Sales and ADP employment. Core CPI is expected to grow, following messy shutdown data, but the spread of estimates is wide and leaning lower than high estimates.

What does it all mean? Earnings season starts and we get CPI, with retail sales tomorrow. Still looks constructive.

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